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December 27, 2016SWEPCO asks Texas comission to raise rates by about 13 percent
AEP Southwestern Electric Power Co. submitted a request today to the Public Utility Commission of Texas to increase the company’s Texas rates by about $69 million annually, or about 12.7 percent. If approved, new rates could go into effect in mid-to-late 2017, according to a press release from the company.
Residential customers using 1,000 kilowatt-hours per month would see an estimated increase of $12.67 per month, or 13 percent, it states. Increases for individual customers will vary depending on each customer’s usage characteristics.
“Even with this proposed increase, SWEPCO rates will be close to the current state average for utilities serving the regulated parts of the state and still well below the national average,” said Venita McCellon-Allen, president and chief operating officer of SWEPCO.
The primary need for new revenue is to cover $34.4 million annually for additional investment in environmental controls at four major power plants, the release states, and the investments are necessary to comply with new U.S. Environmental Protection Agency regulations.
“The goal is always to serve Texas customers with a strong electric system that provides affordable, reliable and safe energy,” McCellon-Allen said. “After investing nearly $700 million to fulfill new federal mandates, we believe SWEPCO has responsibly met these environmental and financial challenges in order to maintain a diverse energy mix with reliable 24/7 power sources serving our customers.”
The request includes four major components:
- $34.4 million for new environmental controls at four power plants—Welsh Plant Units 1 and 3 in Pittsburg, Texas; Pirkey Plant in Hallsville, Texas; Dolet Hills Plant in Mansfield, La.; and Flint Creek Plant in Gentry, Ark.—to comply with EPA mandates.
- $8 million for a change in “transmission cost recovery to align with actual incurred regional transmission costs in the Southwest Power Pool—to help ensure reliability and access to affordable power through the regional transmission system.”
- $2 million for additional vegetation management to clear transmission and distribution lines and to improve service reliability, especially during storms.
- $24.5 million for additional generation, transmission and distribution investment, and changes in operating costs.
“If approved, rates would increase annually by about $69 million, an average increase of about 12.7 percent. This is the net amount of the proposed annual base rate increase of $105.9 million minus $36.9 million for existing transmission and distribution charges that are shown as line items on customers’ bills and will be moved to base rates,” according to information from SWEPCO. Base rates reflect the costs of building, maintaining and operating SWEPCO’s electric system. Base rates do not include the fuel portion of customers’ bills, which pays for fuel and purchased power and is passed through to customers with no profit to the company, according to SWEPCO.
“We work hard to provide high-quality customer service while at the same time managing our costs and continuing to make needed investments in generation, transmission and distribution infrastructure. We recognize the impact that price increases can have on individuals, families and businesses. We believe our electric rates will continue to provide good value for the money,” McCellon-Allen said.
SWEPCO serves 530,000 customers, including 184,000 in East Texas and the Panhandle, 230,000 in Northwest and Central Louisiana and 116,000 in western Arkansas. The company’s headquarters are in Shreveport, La. More information is available at swepco.com.
